Regulatory Capital Rule: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans; Correction (rule, 85 FR 22009, April 21, 2020)
Summary
A correcting amendment from the Federal Deposit Insurance Corporation (FDIC), published in the Federal Register on April 21, 2020 (Vol. 85, No. 77) and effective that day. It corrects the FDIC’s rule text in the interagency interim final rule on the Paycheck Protection Program Lending Facility and Paycheck Protection Program loans that appeared on April 13, 2020, to match the other federal banking agencies. The correction adds paragraph (e)(3)(viii) to the FDIC’s risk-weighted asset rule in 12 CFR part 324. The same pages also carry two unrelated items: a Rural Housing Service policy on Community Facilities loan payment deferrals and a National Credit Union Administration rule on loan participations.
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“Regulatory Capital Rule: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans; Correction (rule, 85 FR 22009, April 21, 2020).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/regulatory-capital-rule-paycheck-protection-program-lending-facility-a-6b79bb2f52/
, SHA-256 7932218ed6cb5090198eddb28e8462285eca22f0ad08042987363e48891b0b51.Full text
22009
Rules and Regulations Federal Register
Vol. 85, No. 77
Tuesday, April 21, 2020
This section of the FEDERAL REGISTER resulting from the COVID–19 pandemic, scheduled loan repayment at the end
contains regulatory documents having general by deferring payments for a period no the agreement. The proposed plan can
applicability and legal effect, most of which longer than one year from the date the include reamortization of the remaining
are keyed to and codified in the Code of original payment is due. The borrower payments within the original loan term
Federal Regulations, which is published under must request any payment deferments after the deferral period expires. All
50 titles pursuant to 44 U.S.C. 1510.
from the Agency in writing. The State proposals should be in accordance with
The Code of Federal Regulations is sold by Directors have the authority to approve the CF servicing regulations outlined at
the Superintendent of Documents. the payment deferral on loans where the 7 CFR part 1951, subpart E;
aggregate balance of principal and 2. The borrower must provide
interest on the loan is $10 million or documentation, such as but not limited
DEPARTMENT OF AGRICULTURE less. Any loans over that amount will to: a statement of cashflows or current
require Agency Administrator approval. income and expenses approved by an
Rural Housing Service Any deferral request for a CF project official of the borrower, a statement of
that has both a CF Direct Loan and a CF temporary closure approved by an
7 CFR Part 1951 Guaranteed Loan, where the request will official of the borrower, or a
[Docket No. RHS–20–CF–0011] modify the parity arrangement that is proclamation or order from a
presently in place or that has a different government entity requiring temporary
Notification of Direct Loan Payment deferral term, will require Agency closure or significant reduction of
Deferrals for the Community Facilities Administrator review and concurrence. facility operations. The documentation
Direct Loan Program The Agency will notify the borrower must substantiate the narrative provided
when payment deferral requests do not under item #1; and
AGENCY: Rural Housing Service, USDA.
meet the Agency’s requirements. The 3. Form RD 1951–10, Community
ACTION: Temporary policy. Programs Workout Agreement will be
Agency does not consider a loan that is
under a deferral agreement to be a signed by both parties prior to executing
SUMMARY: The Rural Housing Service,
delinquent loan. After September 30, any payment deferral action.
hereinafter referred to as the Agency,
2020, borrowers must resume obtaining The borrower should contact the
will temporarily allow borrowers with
Agency approval in accordance with all appropriate State Office by telephone to
direct loans within the Community
applicable program regulations, forms, discuss the request for payment deferral
Facilities (CF) Program to request
and existing authorities. This guidance prior to submitting the required
payment deferrals during the period
applies to all borrowers that had a documents. The State Office contact
specified in the DATES section of this
current repayment status as of March 1, information is available at: https://
notification. This temporary
2020. Borrowers that were delinquent www.rd.usda.gov/contact-us/state-
authorization applies to CF direct loan
prior to March 1, 2020 will continue to offices. Unpaid interest accruing during
borrowers who are experiencing
be serviced under 7 CFR part 1951, a deferral agreement is not subject to the
temporary cash flow issues due to the
subpart E, and 7 CFR part 1956, subpart limitation of the accrued interest under
Coronavirus (COVID–19) pandemic. The
C. 7 CFR 1951.221(a)(2)(ii).
Agency will provide the option of
principal and interest payment deferrals Paperwork Reduction Act: In Bruce W. Lammers,
to borrowers impacted by COVID–19 for accordance with the Paperwork Administrator, Rural Housing Service.
up to one year due to hardship on a Reduction Act of 1995 (44 U.S.C. 3501
[FR Doc. 2020–08429 Filed 4–17–20; 4:15 pm]
case-by-case basis. et seq.), the information collection
BILLING CODE 3410–XY–P
activities associated with this
DATES: This policy is effective May 12,
notification are covered under OMB
2020 and the temporary authorization to
Number: 0575–0066. This notification
request payment deferrals under this FEDERAL DEPOSIT INSURANCE
contains no new reporting or
notification expires on September 30, CORPORATION
recordkeeping requirements that would
2020.
require approval under the Paperwork
FOR FURTHER INFORMATION CONTACT: 12 CFR Part 324
Reduction Act of 1995.
Anita Outen, Community Facilities, at Submissions: The Agency is requiring RIN 3064–AF49
202–720–1497 or via email at the following information from the CF
Anita.Outen@usda.gov. direct loan borrowers to be considered Regulatory Capital Rule: Paycheck
SUPPLEMENTARY INFORMATION: CF has the for a deferral of payments pursuant to Protection Program Lending Facility
statutory authority to defer principal this notification: and Paycheck Protection Program
and interest payments in accordance 1. A brief narrative addressing how Loans; Correction
with 7 U.S.C. 1981a of the Consolidated the COVID–19 pandemic has impacted AGENCY: Federal Deposit Insurance
Farm and Rural Development Act, the operation of the facility and Corporation.
section 331A. Beginning immediately hindered the borrower’s cash flow ACTION: Final rule; correcting
lotter on DSKBCFDHB2PROD with RULES
and through September 30, 2020, the indicating that the circumstances were amendment.
Community Facilities Direct Loan beyond the borrower’s control. The
Program may assist borrowers that are narrative should also include the SUMMARY: The Federal Deposit
temporarily unable to continue making borrower’s name and account Insurance Corporation (FDIC) is
payments of principal and interest due information as well as a proposed correcting its rule text in conjunction
because of temporary cash flow issues operations plan that addresses with the interagency interim final rule
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22010 Federal Register / Vol. 85, No. 77 / Tuesday, April 21, 2020 / Rules and Regulations
that appeared in the Federal Register on with the regulatory capital rules of the of loan participations that a FICU may
April 13, 2020, titled ‘‘Regulatory other federal banking agencies. purchase from a single originating
Capital Rule: Paycheck Protection For the reasons stated in the lender to the greater of $5,000,000 or
Program Lending Facility and Paycheck preamble, the FDIC corrects 12 CFR part 200 percent of the FICU’s net worth.
Protection Program Loans.’’ This 324 as follows: The Board is also temporarily
correction is necessary to conform the suspending limitations on the eligible
FDIC’s rule text to the regulations of the PART 324—CAPITAL ADEQUACY OF obligations that a federal credit union
other federal banking agencies that FDIC-SUPERVISED INSTITUTIONS (FCU) may purchase and hold. In
issued that interagency interim final addition, given physical distancing
■ 1. The authority citation for part 324
rule. policies implemented in response to the
continues to read as follows: crisis, the Board is tolling the required
DATES: Effective April 21, 2020. Authority: 12 U.S.C. 1815(a), 1815(b), timeframes for the occupancy or
FOR FURTHER INFORMATION CONTACT: 1816, 1818(a), 1818(b), 1818(c), 1818(t), disposition of properties not being used
FDIC: Michael Phillips, Counsel, 1819(Tenth), 1828(c), 1828(d), 1828(i), for FCU business or that have been
mphillips@fdic.gov; Catherine Wood, 1828(n), 1828(o), 1831o, 1835, 3907, 3909,
abandoned. These temporary
Counsel, cawood@fdic.gov; Francis Kuo, 4808; 5371; 5412; Pub. L. 102–233, 105 Stat.
1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. modifications will be in place until
Counsel, fkuo@fdic.gov, Supervision L. 102–242, 105 Stat. 2236, 2355, as amended December 31, 2020, unless extended.
Branch, Legal Division, Federal Deposit by Pub. L. 103–325, 108 Stat. 2160, 2233 (12 DATES: This rule is effective from April
Insurance Corporation, 550 17th Street U.S.C. 1828 note); Pub. L. 102–242, 105 Stat. 21, 2020 through December 31, 2020.
NW, Washington, DC 20429. 2236, 2386, as amended by Pub. L. 102–550, FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION: On April 106 Stat. 3672, 4089 (12 U.S.C. 1828 note); Policy and Analysis: Amanda Parkhill,
13, 2020, the Office of the Comptroller Pub. L. 111–203, 124 Stat. 1376, 1887 (15
U.S.C. 78o–7 note); Pub. L. 115–174; Pub. L.
Director, Policy Division, Office of
of the Currency (OCC), Board of 116–136, 134 Stat. 281. Examination and Insurance, at (703)
Governors of the Federal Reserve 518–6360; Legal: Ariel Pereira, Staff
System (Board), and the FDIC ■ 2. Amend § 324.131 by adding Attorney, Office of General Counsel, at
(collectively, the agencies) published a paragraph (e)(3)(viii) to read as follows: (703) 518–6540; or by mail at: National
final rule ‘‘Regulatory Capital Rule: § 324.131 Mechanics for calculating total Credit Union Administration, 1775
Paycheck Protection Program Lending wholesale and retail risk-weighted assets. Duke Street, Alexandria, Virginia 22314.
Facility and Paycheck Protection SUPPLEMENTARY INFORMATION:
* * * * *
Program Loans’’ (PPPL final rule).1 In
(e) * * * I. Background
the wake of economic disruptions
(3) * * * II. Legal Authority
caused by COVID–19, the Board of III. Section-by-Section Analysis
(viii) The risk-weighted asset amount
Governors of the Federal Reserve IV. Regulatory Procedures
for a Paycheck Protection Program
System authorized each of the Federal
covered loan as defined in section I. Background
Reserve Banks to participate in the
7(a)(36) of the Small Business Act (15
Paycheck Protection Program Lending The COVID–19 pandemic has created
U.S.C. 636(a)(36)) equals zero.
Facility (PPPL Facility), pursuant to uncertainty for FICUs and their
section 13(3) of the Federal Reserve Act, * * * * * members. The Board is working with
to provide liquidity to small business Federal Deposit Insurance Corporation. federal and state regulatory agencies, in
lenders and the broader credit markets, Dated in Washington, DC, on April 15, addition to FICUs, to assist FICUs in
to help stabilize the financial system, 2020. managing their operations and to
and to provide economic relief to small Robert E. Feldman, facilitate continued assistance to credit
businesses nationwide. The PPPL final Executive Secretary. union members and communities
rule allows banking organizations to [FR Doc. 2020–08361 Filed 4–20–20; 8:45 am] impacted by the coronavirus. As part of
neutralize the regulatory capital effects BILLING CODE 6714–01–P these ongoing efforts, the Board is
of participating in the facility. temporarily modifying certain
The PPPL final rule permits banking regulatory requirements to help ensure
organizations to exclude exposures NATIONAL CREDIT UNION that FICUs remain operational and
pledged as collateral to the PPPL ADMINISTRATION liquid during the COVID–19 crisis. The
Facility from a banking organization’s Board has concluded that the
total leverage exposure, average total 12 CFR Part 701 amendments will provide FICUs with
consolidated assets, advanced necessary additional flexibility in a
RIN 3133–AF15 manner consistent with the NCUA’s
approaches-total risk-weighted assets,
and standardized total risk-weighted Temporary Regulatory Relief in responsibility to maintain the safety and
assets, as applicable. The PPPL final Response to COVID–19 soundness of the credit union system.
rule also amends section 32 of the The temporary amendments are
FDIC’s regulatory capital rule to clarify AGENCY: National Credit Union effective upon publication and will be
that PPP covered loans originated by a Administration (NCUA). in place through the end of calendar
banking organization under the ACTION: Temporary final rule. year 2020, unless the Board takes action
Paycheck Protection Program will to extend their effectiveness.
receive a zero percent risk weight.2 SUMMARY: The NCUA Board (Board) is In general, two of the temporary
This correcting amendment will add a temporarily modifying certain amendments will expand the authority
lotter on DSKBCFDHB2PROD with RULES
new § 324.131(e)(3)(viii) to the FDIC’s regulatory requirements to help ensure of FICUs to purchase loans and
regulatory capital rule in conformance that federally insured credit unions participations in loans, thereby
(FICUs) remain operational and liquid enhancing their ability to meet liquidity
1 85 FR 20387 (April 13, 2020). during the COVID–19 crisis. needs. Specifically, the Board is
2 See the definition of ‘‘total capital’’ in the FDIC’s Specifically, the Board is temporarily temporarily raising the maximum
capital rules in 12 CFR 324.2. raising the maximum aggregate amount aggregate amount of loan participations
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